Physical servers in a network may be located in a rack unit that houses a plurality of servers. The physical servers may connect to a top of rack (ToR) switch that routes communications between the servers as well as to other external network elements. The ToR switch may be connected to other ToR switches in the network. The physical servers in a rack unit may be configured to host one or more virtual machines that are arranged in one or more virtual networks or subnets. Upon joining the network, the physical server and the virtual machines hosted by the physical servers are assigned context identifiers, such as an Internet Protocol (IP) address and subnet information.